A revised set of fourth-quarter UK GDP figures headlines the economic calendar in European hours. The initial estimate showing the economy added 0.7 percent in the three months through December is expected to be confirmed. Such an outcome would carry relatively limited implications for Bank of England monetary policy expectations, limiting its impact on the British Pound. Needless to say, a significant upgrade is stands to boost the currency in the near term on bets the central bank may move to withdraw stimulus relatively sooner, whereas a downgrade could be expected to yield the opposite result.

Later in the day, the spotlight turns to January’s US New Home Sales report. Median forecasts point to a drop to print at 400k, which would mark the lowest reading since August and the third consecutive month of slowdown. On the “Fed-speak” front, the President of the central bank’s Boston branch Eric Rosengren is scheduled to speak. While on the dovish of the spectrum, Rosengren has supported the “gradual” tapering of QE asset purchases. More of the same this time around coupled with another soft bit of US economic data threatens to undermine risk appetite, weighing on sentiment-linked currencies in the commodity dollar bloc while boost the US Dollar and Japanese Yen.

The Australian Dollar underperformed in otherwise quiet overnight trade, sliding as much as 0.5 percent on average against its leading counterparts. The currency spiked downward alongside benchmark Australian 10-year bond yields, hinting eroding monetary policy expectations were behind the move. The selloff occurred before the release of disappointing fourth-quarter Construction Work figures, hinting another catalyst was at work. Precisely what that was remains unclear however. One possibility is a speech from Australian Prime Minister Tony Abbott, who said the drought plaguing the country is “akin to a natural disaster” and unveiled a A$320 aid package for farmers that was promptly panned as being insufficient by local interest groups.